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What are Junk Debt Buyers?
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Junk Debt Buyers, also called JDB’s, engage in the business of buying distressed assets at pennies on the dollar and then try to collect on that debt. Sometimes they try to go after the full amount, sometimes they’ll accept a settlement amount of 50% or less. It’s not a bad business to be in, except they suffer from one very crucial weakness a smart debt collection fighter knows. When challenged, they can rarely obtain any sufficient documentation of the debt. In other words, they can’t validate the debt after someone has sent a debt dispute letter!
They can rarely provide validation because the original creditors are most likely long gone. They’ve washed their hands of the account once they sold it to the junk debt buyers at such a discount. The information the buyers have may be lost or incomplete. They most certainly lack a proper chain of custody that would prove the junk debt buyers actually own the right to collect on the debt. If you discover that a junk debt buyer has your account (by doing research on the message boards and sites in the first article) you now know that you need to attack their records.
Some may try to produce affidavits from JDB employees who state that a certain amount is due. These may look all fancy, but they are about as valuable in court as toilet paper!
Unless they have an affidavit from an employee of the entity that lent the money, they are going to be out of luck.
Consider the alternative: Suppose I check my records and discover that I actually overpaid the account by $50,000. The company remit the balance due immediately, right? If I can’t produce any records to support that fact, I have no proof. Unless I can produce a company employee to testify to that fact, my claims are baseless.
If you find yourself up against a junk debt buyer, force them to validate and more often than not, they won’t be able to.
(Photo: sercasey)
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Interesting. Had no clue about junk debt buyers. Even though I am not in debt, it’s good information for anybody to be aware of in case of ending up in a situation where you have debt.
I am going to arrbitration against CACH, llc, they did provide a statement from their office about the bedt being owed and some past credit card statements. But the creditor is not listed on my credit report? I had an account with Providian but they were sold to WaMu and then sold to Chase. p.s. I file my response in a timely manner and counterclaim they asked for an extention and was granted but they missed their deadline by 2 days (their counterclaim had the above info in it. any advise?
and the debt is past the 3 years SOL for NC.
They also tried to provide a copy of the Credit Agreement” stating the attorney’s fee and interest. But the account was opened 12/99 and the only part of the “Credit Agreement” was the attorney’s fee and interest form which is dated 03/00. The form is dated after the account was opened. Neither form had a signature or a name on it. Does the agreement stand?